12/06/12
Stocks were very mixed yesterday as the Dow saw a respectable 83-point gain, while the Nasdaq dropped 23-points thanks to a 6% loss in Apple's stock, and the S&P picked up a modest 2-points.
The Dow finished 55-points off its intraday high but still managed to regain and hold the 13,000 level.
[TABLE="width: 88%, align: center"]
[TR]
[TD="width: 241"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 172"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] 0.0036%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] 0.16%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] 0.19%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] 0.04%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] 0.03%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 remained below the broken rising wedge but is back above the 50-day EMA. The chart continues to resemble the chart from last spring as we talked about on Wednesday.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
If the spring pattern continues, we could see a sharp move higher in the coming days that will put a scare into the bears. Their short-covering will add fuel to any rally, but in the spring that rally didn't last very long. Why we'd get a sharp rally here, I don't know. Perhaps a surprise development from the fiscal cliff negotiations.
The Dow Transportation Index had a decent day gaining nearly 1% yesterday, but what struck me most was its ability to easily bounce off of the 20, 50, and 200-day EMAs. We could be seeing the right shoulder of a bullish inverted head and shoulders pattern being formed, but this index has teased us with potential breakouts for months so it is a matter of... I'll believe it when I see it.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Russell 2000 still has two open gaps below, but the current bull flag looks encouraging.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
It looks like the top open gap would get filled once it hits the 50-day EMA. The bottom open gap is another story. It may be waiting to get filled until after we go over the fiscal cliff.
The dollar remains in a downtrend keeping stocks afloat. The 21.68 area will be the next test of support which is about 1% below where it is now.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Another 1% drop in the dollar would help any attempts at a December Santa Claus rally. But Washington will first have to pass a sanity clause. (Thank you Groucho, wherever you are.)
[video=youtube;KS2khYJZKwA]http://www.youtube.com/watch?v=KS2khYJZKwA[/video]
Update: The November jobs report comes out tomorrow. Estimates are look for a gain of 120,000 jobs and an unemployment rate of 8.0%.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.html
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
